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If you’re thinking about itemizing your taxes, get ready to attach an IRS Schedule A to your Form 1040. Here’s a simple explainer of what IRS Schedule A is, who has to file one and some tips and tricks that could save money and time.
Schedule A is an IRS form used to claim itemized deductions on your tax return. You fill out and file a Schedule A at tax time and attach it to or file it electronically with . The title of IRS Schedule A is “Itemized Deductions.”
Schedule A is a place to tally various itemized deductions you want to claim. You then enter the total deductions on your .
Stuff you’ll need if you want to claim any of the most popular itemized deductions:
Schedule A is for itemizers — people who opt to pick and choose from the multitude of individual tax deductions out there instead of taking the flat-dollar at tax time.
Itemizing (and thus, filing Schedule A) usually will save you money if the sum of your itemized deductions is greater than the standard deduction. In 2020 and 2021, the standard deduction is as follows:
If you want to itemize and take any of these popular tax deductions, you’ll need to file Schedule A:
Here are some other tax deductions that require filing Schedule A:
Those aren’t the only tax breaks out there, however. Check out our .
Most name-brand tax software providers sell versions that can prepare Schedule A. Although you’ll likely need to purchase a higher-end version of to itemize your deductions and get Schedule A functionality, that still might end up costing less than paying someone to do your taxes.
You may not be able to deduct everything. Even if you qualify for them, some deductions phase out if your is above a certain threshold or if certain other factors are present in your tax situation. The state and local tax deduction, for example, is capped at $10,000. Good tax software and good tax preparers will ask you a series of questions to determine your eligibility for various tax deductions and whether you should itemize.
Some tax breaks don’t require Schedule A. You can take several deductions without filing Schedule A, which means that if these are your only deductions, you may not have to spend money on a higher-end software package. You take these deductions right on Schedule 1 of Form 1040:
If you miss a deduction, you can fix it later. If you file your tax return and then realize you should’ve taken a tax deduction (or maybe shouldn’t have taken one), you can correct it by filing an amended tax return, or IRS Form 1040X. If you’re filing Form 1040X to get money back, you generally need to do so within three years of filing your original return or within two years of paying the tax, whichever is later. ()
Tax deductions aren’t the same as tax credits. Tax deductions reduce how much of your income is subject to taxes. But tax credits are better; they directly reduce the amount of tax you owe, giving you a dollar-for-dollar reduction in your tax bill. Tax credits aren’t part of Schedule A. So you may still have some big breaks headed your way (such as the ) even if you don’t itemize.